What is the difference between a permanent employee and a freelancer
Sometimes it is difficult to determine what type of employee a company prefers for a particular position – a permanent employee or a contract-based specialist. There are certain legal differences between the two that it is important to understand.
The employment status affects employee benefits, taxes, obligations, and other aspects. Therefore, it is essential to know the difference before deciding on the type of collaboration.
What is a permanent employee?
A permanent employee is a person who works part-time or full-time under an employment contract that defines their rights and responsibilities. In this case, you have more control over how and in what quality the work is performed. You can give directions on how you want the work to be completed. Additionally, you can agree that this person works exclusively for your company. You must also comply with all labor laws and regulations applicable in your country. IGAL’s professional lawyers can assist you in this area.
What is an independent worker, or freelancer?
A freelancer works based on a contract, usually for different organizations. You can assign them a specific task, set deadlines, and give work instructions; however, you have much less control over them. You cannot dictate when or from where they work, and they are typically not exclusive to your company. Freelancers usually provide their own equipment for completing the work – a camera for a photographer, a computer with appropriate software for a designer, etc. You also have fewer tax obligations and, in many cases, are not required to provide health or other benefits.
You may want to decide which type best fits your company. We recommend having a permanent employee if:
You may choose to work with a freelancer if:
Incorrect classification of these two types of collaboration can create legal issues. Our team provides consultations on any aspect, including selecting the type of collaboration and drafting a legally compliant contract.
